The Greek economy in a Kaldorian developmental framework

This paper empirically explores the validity of the Kaldorian insights into economic growth and development. In doing so, we examine the three laws outlined in Kaldor’s analysis and test their relevance to the Greek economy for the period 1970–2006. We employ the ARDL method to analyse the long-run and short-run relationships among the variables. The empirical results confirm Kaldor’s proposition about the importance of the demand side of the economy and thus provide the necessary theoretical and empirical ground for innovative economic policies in these difficult times for Greece